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Thread: Mobile Wireless in Canada: Recognizing the Problems and Approaching Solutions v 2.0

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    Mobile Wireless in Canada: Recognizing the Problems and Approaching Solutions v 2.0

    Hi folks,

    Yesterday we re-released an updated version of the Mobile Wireless in Canada: Recognizing the Problems and Approaching Solutions v 2.0. You can find it here. http://www.cmcrp.org/2013/11/18/exec...ing-solutions/

    The new version doesn't contain any substantive change, but instead focused on cleaning up the report from an editorial point of view and also including a complete reference list for all of the sources underpinning the study. In two weeks time we will update the study one more time by uploading all of the underlying tables and data sets underpinning the various maps, figures, tables, etc. that have not yet by placed on our website.

    One substantive addition to v 2.0 of the report is an extended footnote on page 12 (fn 6) that draws attention to the latest and greatest study now being touted by the CWTA in defence of the status quo and what I see as some of that study's major flaws, i.e. Navigant's Mobile Wireless Market Performance In Canada:
    LESSONS FROM THE EU AND THE US http://www.navigant.com/~/media/WWW/...ada-FINAL.ashx

    As always, happy to talk about this stuff further with anyone who is interested.

    best wishes,
    Dwayne

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    I had a quick read of the document and my initial thought about the debate on wireless competition in Canada was a game of I will see your report and raise with two more reports.

    Is it valid to compare ARPU between OECD countries without making allowances for people in North America to opt for high cost iPhones on contract? Stats I seen indicate that the markets acceptance of iPhones are different.

    Is Canada not a bunch of regional markets with different cost structures? If so, can all markets support 4+ providers? if this is the case why did Shaw decide not to build a network?

    One conclusion from looking at the wireless service map is that there are a significant number of areas that have 1 or maybe 2 providers. This would appear to be reasonable as you need a minimum population density to support the costs associated with the required infrastructure. So is solution to create more competition in these areas a subsidy supported by the taxpayer or by users in high density area?

    Is it reasonable to compare the rates in the UK to Canada when the UK has twice the population and significantly less antennas?

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    What does "hhi indices" mean?

    Its interesting to note that even though we have 60% weighted LTE coverage (thats based on where people live, right?), only 7.2% of all connections use LTE. Obviously someone's doing something wrong.

    Sent with the HoFo App

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    Quote Originally Posted by rlc5466 View Post
    I had a quick read of the document and my initial thought about the debate on wireless competition in Canada was a game of I will see your report and raise with two more reports.

    ........Is it reasonable to compare the rates in the UK to Canada when the UK has twice the population and significantly less antennas?
    Is that reasonable to say that Can cell market is monopolised? I say yes.
    This company mvno is operational in a lot of W Eur countries and in the U S
    http://www.lycamobile.us/en/aboutus
    It cannot operate in here at all.
    Ting a Can company can only work in the US, but not here.
    Can does have a real issue on cell competition.
    If we have 3 companies competing that is OK. But they are colluding rather than competing. Why would they bother?

    Daniel

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    Quote Originally Posted by gjeff12 View Post

    Its interesting to note that even though we have 60% weighted LTE coverage (thats based on where people live, right?), only 7.2% of all connections use LTE. Obviously someone's doing something wrong.

    Sent with the HoFo App
    Yes. Most people are stuck with crappy plans like $60 for 100mb data a month. That is a lot of money for a family of three.
    You apparently buy the idea that lte is for hotspoting for on line game or vdo streaming both of which should be taken care of by WiFi or ethernet connection.

    Daniel

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    Quote Originally Posted by rlc5466 View Post
    I had a quick read of the document and my initial thought about the debate on wireless competition in Canada was a game of I will see your report and raise with two more reports.

    Is it valid to compare ARPU between OECD countries without making allowances for people in North America to opt for high cost iPhones on contract? Stats I seen indicate that the markets acceptance of iPhones are different.

    Is Canada not a bunch of regional markets with different cost structures? If so, can all markets support 4+ providers? if this is the case why did Shaw decide not to build a network?

    One conclusion from looking at the wireless service map is that there are a significant number of areas that have 1 or maybe 2 providers. This would appear to be reasonable as you need a minimum population density to support the costs associated with the required infrastructure. So is solution to create more competition in these areas a subsidy supported by the taxpayer or by users in high density area?

    Is it reasonable to compare the rates in the UK to Canada when the UK has twice the population and significantly less antennas?
    Quick reply:

    For me, this isn't a game and if you look so far there's only one report in the ring that's not funded by industry or others with some kind of interest to assert: mine. There is, of course, other good independent research, namely that of the Canadian Spectrum Policy Research Group at Ryerson (Middleton, Taylor, Goodrick).

    Second, and we need to take care of this one since it seems to be a popular notion these days amongst those who defend the status quo, i.e. if there was room for more competition why didn't Shaw execute. Answer? Because why would it jeopardize fat profit margins of 40% (EBIDTA) and operating profits just under 30% to take on the incumbents?

    For all its flaws, the Church Wilkins report from UCalgary shows that Rogers incurred lower profits -- albeit still healthy by the standards of average industrial profits in Canada -- for years when it took on the incumbents. Shaw would have to be willing to accept much lower profits than what is currently bringing in to make an effective go at it and I can see no reason why it, or its shareholders would want to do that. Others, however, making low double-digit to low-20% range, as with some of the Euro cellcos, might be perfectly happy with such profits, and it is those that need to be encourage, along with the likes of Wind which might just pull a bunny out of a hat yet to become the fourth effective national wireless carrier as the decks clear for the upcoming auction, etc.

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    Quote Originally Posted by Mediamorphis View Post
    Second, and we need to take care of this one since it seems to be a popular notion these days amongst those who defend the status quo, i.e. if there was room for more competition why didn't Shaw execute. Answer? Because why would it jeopardize fat profit margins of 40% (EBIDTA) and operating profits just under 30% to take on the incumbents?
    Not only that. Shaw's major business is in media where Rogers is a dominant player.
    The writing is on the wall as well in Quebec where Videotron had every reason to have some kind of roaming agreement with Wind (all aws network). It never worked as Videotron is a small media player compared with Rogers.

    Daniel

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    Your statement about Shaw not executing has interesting implications on the quality of the governance process at Shaw. You would expect that the business case that supported the spectrum purchase identified the top and bottom line financials.

    Other views

    - could be that the plan was to flip the spectrum when the 5 year no sale clause expired. If this was the case then the hiring of people to develop the implementation plan was a charade.

    -could be that they reevaluated the financials and decided the business was not viable based on changes in the competive landscape

    -could Rogers have made some interesting proposals to encourage Shaw not to proceed

    I don't expect that the real reason will ever become public.

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    Quote Originally Posted by rlc5466 View Post

    - could be that the plan was to flip the spectrum when the 5 year no sale clause expired. If this was the case then the hiring of people to develop the implementation plan was a charade.

    -could be that they reevaluated the financials and decided the business was not viable based on changes in the competive landscape

    -could Rogers have made some interesting proposals to encourage Shaw not to proceed

    I don't expect that the real reason will ever become public.
    FYI Shaw does sell the spectrum to Rogers in 2014 pending approval which is unlikely to proceed. Also that tells us that the Fed cannot cave in re the sale of Mob to Telus at all as it will open a floodgate.
    I recall that there were some gestures of Shaw trying to launch in 2009. Merely gestures as far as I can see.
    Rogers will have an army of lawyers to defend in case of anyone accusing them of collusion.

    Daniel

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    Quote Originally Posted by rlc5466 View Post
    Is it reasonable to compare the rates in the UK to Canada when the UK has twice the population and significantly less antennas?
    I haven't read the article yet, so if it states otherwise, I apologize. That said, last time I checked, the UK had quite a few more towers compared to Canada.

    Sent with the HoFo App

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    Quote Originally Posted by dtong22 View Post
    The writing is on the wall as well in Quebec where Videotron had every reason to have some kind of roaming agreement with Wind (all aws network). It never worked as Videotron is a small media player compared with Rogers.

    Daniel
    Why would anyone want a roaming agreement with Wind? (who has such a small network?)
    Videotron roams on Rogers cross country
    It is sad I need to state the obvious but some people just don't get it. Any posts I make are my own OPINIONS and in no way represent the views of my employer

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